"We are glad to see that Albania has become a socialist agricultural-industrial country with a modern industry, a collectivized agriculture and an advanced culture."

Vice Premier Chen Yi, November 29 1961, Peking

Throughout the second half of the twentieth century Albania was one of the poorest countries in Europe. Recently Albania's transition from a communist state to democracy and a market economy has been accompanied by impressive growth, albeit from a low starting point. Although "cumulative growth since 1990 is among the highest of all transition economies" (World Bank 2006), its GDP per capita of $5,300 (PPP) means that Albania continues to rank among the poorest European countries:

2005 GDP per capita (Purchasing Power Parity, US$)

Switzerland

35,600

France

30,400

Greece

23,400

Slovenia

22,300

Poland

13,800

Croatia

13,000

Bulgaria

9,000

Bosnia-Herzegovina

7,000

Albania

5,300

Philipines

5,100

Armenia

5,000

Albania's infant mortality rate is the highest in Southeast Europe: 19 per 1000 live births in 2006 (WHO). In the Balkans only Rumania has a higher maternal mortality rate. Limited access to clean water and sanitation services continues to be a health risk. Fewer than 20 percent of rural households have access to running water within their homes while only 41 percent of homes contain a toilet. Only half of all citizens have access to solid waste removal services (World Bank 2006). With 1.3 doctors per 1,000 people, Albania has the lowest coverage in the Balkans. WHO data implies that the number of doctors and nurses has declined since the mid 1990s (World Bank 2006).

Amid declining public spending on education the gross enrollment rate in secondary education fell from 78.5 percent in 1989 to 43.6 percent in 2002. Enrollment is 15 percent lower in rural areas and significantly among the poorest households (IMF PRSP 2006). Underfunding is particularly problematic in secondary education.

Rural areas and the mountainous northeast of Albania have long been known as one of the poorest corners in Europe. The agricultural sector initially experienced growth after the end of communism, partly due to the move from collective farms to private holdings, but has since witnessed a slowdown. Production suffers from small land sizes, a lack of modern inputs and infrastructure and poor access to markets. Many remote regions are isolated in a country where "only 12 percent of roads are paved and only 8 percent of all roads can be considered good." (World Bank 2006).

The past 15 years have seen large scale migration from the countryside to the cities. Gezim Nohemi, who left the northern village of Theth, explains why many in the village have had to leave their homes

"It was very, very poor. There was no income, how were we supposed to make a living? Raising cattle? There was no road to the village and no work. We had to leave."

The growth performance in recent years has benefited the poor. A recent World Bank report speaks of "a massive reduction in poverty" between 2002 and 2005:

"High GDP growth rates have been accompanied by a massive reduction in poverty. … roughly 235,000 out of about 800,000 poor people in 2002 were lifted out of poverty."

However, the World Bank's report also finds that urban poverty declined much faster than rural poverty. Tirana has seen an especially large rise in incomes. This suggests that migration towards the cities is likely to continue.